CO2 emissions efficiency and marginal abatement costs of the regional transportation sectors in China

- The manuscript focus on provincial transportation system in China.
- The manuscript evaluated the CO2 emission efficiency and abatement cost.
- The CO2 efficiency of different regions differs widely.
- Different areas have different marginal abatement cost.
- CO2 emission efficiency and abatement cost present a negative correlation.

Nowadays, evaluating CO2 emissions efficiency and its marginal abatement cost in transportation sectors has been a hot topic. However, while evaluating the CO2 marginal abatement cost using data envelopment analysis approach, the weak disposability of CO2 may imply positive abatement cost, which undoubtedly violates our common sense. To obtain non-positive marginal abatement cost, CO2 emissions should be treated as an input. To reconcile this contradiction, this paper intends to propose a global, directional distance function model based on previous study to investigate the productivity, economic efficiency, CO2 emissions efficiency, and marginal abatement cost of the China's regional transportation sectors during 2007-2012. The results show that: (1) the productivity, economic efficiency and CO2 emissions efficiency of different regions differ widely. More specifically, the coastal areas of south China perform better than the other areas in terms of productivity, economic efficiency, and CO2 emissions efficiency. (2) Generally, the economic efficiency is greater than CO2 emissions efficiency, which is relatively low in most areas. (3) A negative correlation is found between CO2 emissions efficiency and its marginal abatement cost. For a 1% increase in CO2 emissions efficiency, the CO2 marginal abatement cost declines by 102 Yuan (in 2004 constant price). The results imply that improving CO2 emissions efficiency plays an important role in marginal abatement cost reduction, and it also provides us a new approach to reduce abatement cost besides the technical progress.